Bear funds rule

CBS.MarketWatch.com

Simply put, when the market drops, funds designed to follow the inverse of a given index will rise. Case in point, ProFunds UltraShort OTC (USPIX) gained 13 percent for the week that ended Friday, according to Lipper Inc. This fund engages in short selling and other derivatives plays, hoping to double the inverse of the Nasdaq 100 Index
$NDX
, which lost 6.4 percent last week.

Before jumping into a portfolio like this, bear in mind (pardon the pun) that such funds are generally utilized by market timers looking for opportunities like last week. Few hang on for the long-term unless they feel that the market will head south for an extended period of time. Long-term UltraShort OTC investors, for instance, would have suffered a 74 percent decline over the last 12 months if they had bet against the bulls.

ProFunds also had the No. 2 performing fund last week with a 9.6 percent gain by its UltraBear (URPIX) portfolio. This fund is designed double the inverse of the S&P 500
SPX, +0.01%
index, which fell 4.4 percent in the week ending Friday.

Top-10 performing funds for the week ending Friday, July 23, according to Lipper Inc:

Orbitex Health & Biotechnology Fund is the newest fund to be added the Orbitex fund family, though a similar offering has been available to its European investors since 1991. Manager Timothy F. Bepler says the time is ripe to invest in such a fund. "From the aging baby boom generation to expansion of scientific discoveries and a more efficient FDA approval process," he said in a statement.

The former Merrill Lynch healthcare analyst said he'll be looking specifically for technology innovators, companies dominating a scientific niche, research and development powerhouses, and service providers to large pharmaceuticals. Courtney Smith, chief economic strategist, and John W. Davidson, chief investment officer, are also assigned to the management team.

Orbitex also manages the Orbitex Strategic Natural Resources (ONRAX)
ONRAX
, Info-tech and Communications (OITAX), Focus 30(OFTDX) and Growth funds (ORGAX)
ORGAX
. All funds in the family come in Class A and B shares with A shares carrying a front-end load of 5.75 percent and an expense ratio capped at 2 percent.

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